Think about this… On average 40% of all purchases are completed outside of the item master, 60% are physician preference items (PPI). This means 4 out of 10 times a requisition is submitted the material management personnel manually builds the item.
They not only build the description and transactional information but need contract and revenue code information to complete the build. In most cases, revenue codes are required on the patient bill within 72 hours. With an average hospital creating 200,000 requisitions per year using staff of 5 buyers this is a daunting task and places a significant amount of the hospital’s revenue at risk.
Formulary management is a lean management approach to managing products used with a single hospital or group of associated hospitals (IDN). The goal of formulary management is to identify, categorize and manage non-approved user activity so that a balanced approach between physician preference and organizational cost reduction mandates can be achieved.
Much of what is contained in your item master is often either outdated or otherwise inaccurate. Typically, only 72% of all items within a perioperative department are cataloged properly with a materials management information system (MMIS).iv The reasons for this failure are multifold. New catalog information isn’t added in a timely fashion. Discontinued items aren’t deleted. Codes or descriptions aren’t typed correctly. But the problem runs even deeper than that, as the very nature of the item master
itself is outmoded.
How do organizations attain and sustain spend reductions within their acquisition process while considering patient and employee safety, environmental impact, efficiency, and cost-effectiveness?
The first logical step to address this paradigm shift is to get back to basics and conduct a microscopic
evaluation of an organization’s value analysis model.
Would you perform a procedure on a patient before validating eligibility for reimbursement? Of
This paper will present the next evolution of the healthcare supply chain solution that combines artificial intelligence (AI) and a virtual item master to provide a level of detail and comparison almost impossible to achieve with current systems and information. We’ll examine “smart attributes” and product ontologies (product/attribute mappings) that can systematically align products so that they can be effectively mined. Through increased standardization and better control of high-cost physician preference items, effective mining can drive
cost savings. Users benefit from a more complete understanding of a product’s total value, including clinical and profit impact, not just the cost paid.